Duplex Deal Analysis

2 Replies


I realize that all deals are relative based on goals, financial situations, and market value. With that said, I am a rookie investor and want to make sure I do my due diligence before purchasing. 

Goal: obtain 10k/month in passive income through cash flow on multi family units. Allowing flexibility later in life (I'm 28 now)

background: Own triplex in SD...decent cash flow. Also, I work in an industry that requires me to move from time to time. 


200k Duplex 

2/1 rents for $1,250 (rented for another year)

1/1  rents for $750 (rented for another year) 

Potential cash flow: $700/month

Market: Fort Lauderdale, FL 

I would us FHA financing. The owner is also my realtor.

Let me know what steps you guys would take to make sure this is a fair deal or, if you happened to know the market, would love some insight as well. 



Joel, what costs are you factoring in to your having potentially $700/month in cash flow?

If you're obtaining FHA financing, you're going to have to live in one of the units also. How much are you putting down?

Check out this quick video on the 50% rule to see some costs typically factored in:

Is your $700 figure NOI or cash flow?

Correct me if I'm wrong, but you're financing under FHA at 3.5% on 200k PP = $7k down, grossing $2k a month in rents before expenses and debt service? Like @Mehran K.  indicated, FHA financing will require you live in one unit, presumably the 1/1 unit as you are a young guy, which, if already rented to a tenant for a year, will will be an obstacle in obtaining FHA financing, as it is a primary requirement for such a loan. 

Also, ignoring the current tenant, and assuming you WERE actually a live-in investor in one unit, your cash flow wouldn't reflect the indicated $700/mo (assuming accurate expenses), because you wouldn't be receiving income from one half of the duplex.... Although you would be building equity in the property from both your tenant's rent, and "your" rent, I wouldn't necessarily say, assuming all other figures are correct, that your cash flow = $700, because the 1/1 unit isn't drawing income...you are paying out of pocket for it.